Wall Street Legend

Yes.

Ye Dongqing expressed his views in public in preparation for the upcoming subprime mortgage crisis in two years.

The entry point is the credit rating agency, and it is bluntly stated that these companies cannot do their job well and give up the exploration of objective truth for the sake of money, putting the entire CDO market in danger.

It is February 2005. In the past four years or so, due to the continued prosperity of the U.S. housing market and the low interest rates in the United States in the past few years, the U.S. subprime mortgage market has developed rapidly, and a large number of financial professionals have Seeing the benefits, businessmen rushed in resolutely and heated up the market.

Subprime loans in the real estate industry are different from ordinary loans. They are mainly aimed at people who have insufficient assets and income and want to buy real estate. According to regulations, the interest rates are relatively stable in the first few years, and then increase or decrease according to the fluctuation of market interest rates.

People think that investing in real estate is profitable, and the review of lenders is not strict enough. The United States, which has been indifferent to the market for decades, has once again set off a wave of real estate boom. The subprime mortgage market in other areas is also overheated, and more derivatives have also been derived from this. Various types of financial products attract an influx of money.

What can be expected is that with the subsequent cooling of the U.S. housing market, especially the increase in short-term interest rates, subprime mortgage repayment interest rates have also risen sharply, and the loan repayment burden of home buyers has greatly increased, which will most likely lead to large-scale loan defaults. .

The history is strikingly similar.

This is due to flaws in the market management mechanism, which some people misunderstood as having loopholes to exploit. The booming development of the subprime loan market has not changed with the arrival of Ye Dongqing. Wherever there are interests, there will be desperate businessmen. This Very reasonable.

Actually.

Judging from the current situation, the subprime mortgage market is indeed very good, and the crisis has just begun to show some signs. For example, as Ye Dongqing just said, the default rate is rising and the credit rating agencies are in name only.

It’s not that I haven’t thought about watching the market from the other side and wait until the time is almost ripe to enter the market and make a fortune.

However, Ye Dongqing is no longer the poor poor guy he was in 2002, who couldn't sleep because he wanted to get rich. This benefit is not crucial to him, and it will only make those who invest in hedge funds interested. Rich people and themselves are richer, but for the vast number of ordinary people who have invested in real estate, they will lose everything once the subprime mortgage crisis occurs like in the previous life.

This is due to his sense of social responsibility as a super rich man. In addition, Ye Dongqing also feels that another economic crisis may affect his personal interests, with both benefits and risks.

Since he already has more money than he can spend in his lifetime, and the speed of spending money is far slower than the speed of making money, he feels that there is no need to make profits through such accidents and impose his own happiness on the pain of many ordinary people. That's why I warned you in such a public place.

After saying so much in one breath, when he picked up the water glass in his hand, he saw people talking and talking among themselves. Even Old Soros, Mr. Dario and others looked heavy. Considering the current scale of subprime mortgages, if This industry is not as safe as originally thought, and they could foresee the far-reaching impact it would have.

As for spending money to get ratings, most people at the scene knew that it was no secret.

Ye Dongqing knew that what he said would definitely offend those credit rating companies, but he didn't care, because his current business dealings were not many, and there wouldn't be many in the future. If these institutions lowered the ratings or valuations of his companies, Doesn’t it just confirm the criticism that they are not objective and impartial? The three major credit rating agencies benefit from lagging policy support and currently share 95% of the global rating market. There have been too many good days. Recently, There has been some expansion over the years.

He doesn't know whether he can change the current situation and quickly contain the crisis before it arises, but he will definitely try his best. He has already thought of asking some people in Washington and the current chairman of the Securities and Exchange Commission to talk about this matter.

If he is lucky, he can still make a fortune by shorting these institutions and companies that hold too many junk subprime mortgage products. As a businessman, how can he let go of the money he deserves? In the morning, he had already talked with Mr. McCord and Mr. Wu Di I have contacted each other separately, and I guess I am already trying to open a position.

An investigation has been conducted beforehand, and the scandal is true. Now that the shady story has been revealed, the credit rating companies and the subprime mortgage market will probably fall into quagmire. After all, Ye Dongqing's influence is not small.

The next topic continued to focus on credit ratings and subprime mortgage business. People at the scene listened very carefully. From time to time, someone used their mobile phones to send messages, or directly went out to make calls. Some were selling subprime mortgage assets, and some had already smelled the smell of U.S. dollars. , prepare to try short selling.

For this group of people, the mere three thousand US dollars in ticket money was not in vain. Ye Dongqing had already explained it in detail, so detailed that they also noticed signs of danger...

It is never easy to be in the limelight. If you are not strong enough, you will be slapped in the face, especially when it touches the interests of certain people.

Generally speaking, the interest rate of subprime housing loans is two to three percentage points higher than the normal loan interest rate. Except for Ye Dongqing, most of the fund managers on the scene have allocated subprime mortgage assets, and some are making money on the periphery.

Some people are thinking, and some are so angry that they jump over the wall. For example, a manager from Bear Stearns who was heavily involved in subprime mortgages suddenly stood up and shouted, "It's all bullshit! There's no problem with the credit rating, regardless of etiquette." , the subprime mortgage market is no problem, I don’t know where you got the data, but neither the default rate nor anything else is that high!”

Including Ye Dongqing, everyone looked at this guy. He was walking out angrily and was already planning to leave.

In addition to him, one of the world's insurance giants, an executive of American International, the parent company of AIA, also suddenly left the market. This company underwritten too many subprime mortgage assets and was thinking about verifying whether it was true as Ye Dongqing said. Said that there is a risk of credit rating water injection.

It was other people's business to listen or not. Ye Dongqing was sure of victory and didn't feel ashamed at all. His face was built on success again and again, and he didn't need others to add glory to him.

He continued to elaborate on other points as if nothing was wrong, and finally concluded: "Credit rating agencies must carry out a comprehensive rectification and strengthen supervision to re-establish market confidence. As for subprime housing loans, I do not think it will be the same." It would be a good thing to lend large sums of money to people who may not be able to repay the money at any time. If it continues to develop, it will inevitably cause a chain reaction and lead to a financial crisis. Judging from the current scale of subprime mortgages, the crisis already exists, but when will it break out? The problem……"

After speaking, he turned off the microphone and stood up to leave, obviously not prepared to give others a chance to ask questions.

Because of this public statement, an "earthquake" is already on the way. In such a short period of time, there were suddenly large orders to short Moody's, Fitch, and Standard \u0026 Poor's. There were several short orders, with a total scale of more than 3 billion US dollars. Still growing...